Idea for more downtown rentals revived

Software entrepreneur Jesse Biter, building on a vision city planners kickstarted more than a decade ago, hopes to develop nearly 200 apartment units downtown.

If Biter's talks to acquire and build on parcels near the Whole Foods Market Centre are successful, it will mark Sarasota's first significant residential development in more than five years.

Biter, who previously acquired a handful of office and retail spaces downtown, hopes to close by May on the parcels, which total more than an acre.

The property at 1445 Second St. is occupied by United Way of Sarasota County Inc., which had contemplated a move even before its merger last year with counterparts in Pinellas and Hillsborough counties.

Biter hopes to build small, studio-style apartments aimed at young professionals who want to live downtown but can't afford condo prices that can reach into the millions of dollars.

He contends that the units, which would average 800 square feet and rent for an estimated $1,000 to $2,000 per month, would benefit local employers as well. Biter said those earning about $40,000 per year would be able to afford the units.

"As an employer, it's important to me that my employees are close to their work," Biter said. "I know a lot of other businesses feel that way as well.

"The majority of my employees currently live in new digs, but drive 20 or 30 minutes to work each way. There is just nothing nice and new that they can afford downtown."

Biter declined to discuss the contract prices for the parcels, which also include a lot at 1401 Second St.

Steve Horn, an Ian Black Real Estate agent representing Biter, estimates that the proposed 10-story project will cost at least $30 million, if all the units planned are developed.

Biter expects to begin construction sometime within a year.

Biter's plan dovetails with Sarasota's 2001 Downtown Master Plan, which advocated for more residences and entertainment in the downtown area to create a pedestrian-friendly and urban experience.

Though several condominium towers were built in the mid-2000s as a result of the Duany/Plater-Zyberk & Co.-authored plan, few residences were built with younger or less-affluent occupants in mind.

Real estate experts said Biter's plan would help fill a niche, especially downtown.

"We get a lot of renters coming in and asking about downtown," said Amy Chapman, rental director for the regional brokerage Michael Saunders & Co. "There's a big demand for products between $1,000 and $2,000."

Biter's plan comes as various investors -- among them the giant Blackstone Group of New York -- have begun snapping up residential properties to meet increased demand for rentals.

In the past year, average residential rents in Sarasota have jumped 9 percent to 92 cents per square foot, according to Sarasota Management & Leasing.

Biter, a 36-year-old Pennsylvania native who made millions of dollars developing software for the auto industry, hopes to differentiate his project with amenities aimed at younger tenants, including a rooftop restaurant, first-floor retail space, a laundry service and a communal auto sharing program.

The latest incarnation

Biter's idea for the property is not a new one.

In April 2007, developer Leonard Garner tried to combat a lack of so-called "attainable" housing by proposing a 10-story apartment complex with the same number of units on the same site.

"This is absolutely the perfect site for this use," Garner said at the time. "It has everything one could dream of -- location, configuration, proximity to transportation, everything."

But Garner's "Alcazar" plan collapsed when the region's housing market slumped, financing dried up and the Great Recession took hold.

If Biter is able to pull required city permits for his complex by 2015, he will be able to take advantage of the increased residential density that Garner was granted, which allows for more units than typical zoning permits.

Analysts say the project has a better shot at being built now, the result of economic improvements and changes in Sarasota's makeup.

"Sarasota has come of age, and we need to take advantage of it," said Stan Rutstein, a commercial broker with the Re/Max Alliance Group.

"Downtown is a very hot vehicle," Rutstein said. "People of all ages want to live downtown, and no new product has come out in years, certainly none that's affordable."

Apartments, in particular, have not been created because developers would rather focus on condos, which require a single sale to a buyer.

But as residential financing has been slow to rebound, developers are once again considering rentals to appeal to a swollen market of recession-battered borrowers now forced to rent as a result of foreclosures.

If the land purchase goes through -- the United Way's building would be razed and the group would likely relocate elsewhere downtown -- it will be the latest in a series of purchases for Biter.

In addition to a penthouse unit in downtown Sarasota's Marina Tower downtown he bought for $3.85 million in December 2007, Biter spent $2.8 million for a former bank building now used as an incubator for high-tech companies known as "The Hub."

Biter also paid $1.6 million to buy 11,000 square feet of retail space on the ground floor of the city's Palm Avenue parking garage at the beginning of last year.

And most recently, companies he controls paid nearly $4.1 million to buy Main Street storefronts totaling 18,000 square feet.

"I am very confident that Sarasotans will want to live here," he said of the planned apartments. "I already have more than 40 people on a waiting list, plus three businesses that have agreed to lease a total of 35 units they can subsidize for their employees."